Morning Memo: Pension Problems?

From today’s morning memo:

Gov. Andrew Cuomo’s pension smoothing proposal appears to be on the verge of withering on the vine.

The first sign of trouble — which appears to have caught the administration by surprise — was the unusual skepticism of the plan from Syracuse Mayor Stephanie Miner, the governor’s hand-picked party co-chairwoman for the state Democrats.

That Miner, who insisted she continues to have a professional relationship with Cuomo, would criticize the plan for potentially costing local governments more in the future, is highly unusual, despite her protests that those of us in the fourth estate are merely trying to stoke controversy.

In testimony before a joint legislative budget panel in Albany on Monday, Miner did not ease up on her critique of the smoothing plan, which was built in to Cuomo’s $142.6 billion budget proposal released last week.

She openly questioned whether it could hurt future elected officials’ ability to budget once the savings are all but used up now.

“How do we know this plan is viable 25 years down the line?” Miner said, adding, “We might simply be financing another liability that we will not be able to pay.”

And today’s New York Times brings more criticism from the proposal. Comptroller Tom DiNapoli is not a political ally of the governor and the two have butted heads in the past after Cuomo proposed a defined contributed benefit plan for some state workers that was compared to a 401(k) plan for the private sector.

It all brings to mind June 2010, when then-Gov. David Paterson had his own plan to allow localities to pay lower pension costs now at the expense of future savings, a proposal that Democrats had warned DiNapoli could sink him. In the end, DiNapoli was criticized for backing a form of amortization by his Republican challenger Harry Wilson, but the comptroller was elected to a full, four-year term anyway.

But DiNapoli’s criticism in 2012 counts.

He has to sign off on the pension smoothing proposal, and while there was no indication that DiNapoli’s office was ruling it out, saying one has “serious concerns” sounds, well, pretty serious.

Not to be out done, Cuomo has his own local government allies backing him on the proposal.

In his own low-key way, Rochester Mayor Tom Richards was perhaps the strongest public defender of the proposal on Monday.

Testifying before Miner, Richards said the proposal was akin to the $15 million in spin-up aid he received from the state in the previous year.

“I got to get through this year and when I looked at the budget and looked at this particular proposal, it’s the best thing there to getting us through another couple of years,” Richards said.

Cuomo’s office later rolled out a serious of happy-quote endorsements from both Republican and Democratic local government officials backing the plan.

What this all boils down to is what to do about the state’s cash-strapped local governments and especially the cities, which have struggled over decades of a shrinking tax base, lost revenue and declining population while costs have soared thanks in part to the Great Recession.

The sense seems to be from critics is that Cuomo’s budget didn’t go far enough on helping the local governments, while the only other option here is sending more money and taking a politically risky ax to those dreaded unfunded mandates.